Bank of America Corp., the largest U.S. bank by assets, earned $6.3 billion from its global banking
and markets division last year, giving that business almost
double the annual profit of any other segment.

The unit earned $724 million for the fourth quarter,
according to a statement today from the Charlotte, North
Carolina-based bank. While that was down 50 percent from a year
earlier because of higher costs and taxes, advisory and
underwriting was the highest for 2010 as equity offering fees
jumped 45 percent from the third quarter, and Chief Executive
Officer Brian T. Moynihan called the full year “solid.”

Bank of America has leaned on the investment bank, led by
former Goldman Sachs Group Inc. trading head Thomas Montag, to
bolster earnings since the 2009 takeover of Merrill Lynch & Co.
Profits from trading and underwriting last year gave Moynihan a
cushion to absorb losses and writedowns in retail home loans and
credit cards.

“Montag’s business has held them up, it’s been a source of
revenue that has offset the disaster their mortgage division has
turned into,” said Tony Plath, a finance professor at the
University of North Carolina at Charlotte. “The sales and
trading guys and underwriting guys on the debt side made a lot
of money for Bank of America last year.”

Bank of America reported a $1.24 billion fourth-quarter
loss, its second consecutive deficit, as the lender boosted
provisions tied to faulty loans and litigation and wrote down
the value of its mortgage unit.

Global Wealth

The global wealth and investment management unit, which
includes the Merrill Lynch brokerage, posted quarterly net
income of $332 million. That’s up from $257 million in the third
quarter and down from $529 million a year earlier. The unit is
run by Sallie Krawcheck, 46, the former chief financial officer
of Citigroup Inc. and ex-head of the New York-based bank’s
global wealth management unit.

“The wealth management business is delivering,” said Ania Aldrich, who helps manage $5.3 billion for Denver-based Cambiar
Investors LLC, including 8 million warrants to buy Bank of
America shares. “There is tremendous potential for leveraging
this franchise with the core Bank of America, cross-selling
banking products to high-net worth individuals and vice-versa.”

Montag, 54, has been expanding operations overseas,
especially in Asia. Montag was based in Tokyo and Hong Kong from
1998 through 2006 as a Goldman Sachs executive, including five
years as co-president of Japan. Merrill announced it had hired
Montag in April 2008, a few months before the firm agreed to be
sold to Bank of America.

Fixed Income

Trading revenue fell to $2.59 billion in the quarter, as
the bank faced what it called a “difficult” environment. Bank
of America is still “comfortable” with its target of
generating $4.5 billion to $5 billion in trading revenue per
quarter, Moynihan, 51, said on a conference call with analysts.
Trading revenue for the year was $17.3 billion, down 1.8 percent
from 2009.

The division generated $1.8 billion of revenue from fixed-
income trading in the fourth quarter, up 40 percent from a year
earlier. That figure, down 49 percent from the third quarter,
trailed JPMorgan Chase & Co.’s $2.88 billion and beat Goldman
Sachs’s $1.64 billion.

Bank of America’s unit generated $789 million from equities
trading, a 19 percent decrease from the third quarter. That
trailed JPMorgan’s $1.13 billion and Goldman Sachs’s $2 billion.

‘Tougher Quarter’

“It was just a tougher quarter in terms of client activity
and tougher quarter in terms of market, and it’s not any one
area,” Moynihan said. “I really chalk it up to sort of a
malaise and tougher market quarter.”

Bank of America’s equity underwriting revenue climbed to
$496 million from $341 million in the third quarter, while fees
from bond offerings increased 9 percent to $869 million. The
firm was the third-ranked underwriter of U.S. bonds and the
fourth-ranked underwriter of global equity offerings in 2010,
according to data compiled by Bloomberg.

Montag’s group also generated $337 million from its
advisory work, down 6 percent from a year earlier. It was the
ninth-ranked adviser on announced global mergers and
acquisitions last year, according to data compiled by Bloomberg.

“The investment banking business tends to be cyclical and
they can’t count on what they earned in 2010 next year,” Plath
said.